Merging with another company can be risky. The failure rate for corporate mergers ranges from 65 percent to 85 percent, according to CSC World, a magazine published by information technology services company Computer Sciences Corporation (CSC), El Segundo, Calif.

A merger fails when companies' plans don't turn out as they expected and operating results deteriorate, causing shareholders to suffer.

But how do companies get to that point? What fatal steps result in a merger's demise? Following are some reasons mergers and acquisitions fail:

• Failure to focus on revenue can cause companies to lose their revenue momentum and halt growth. Companies become distracted by costs and forget revenue is what determines a merger's outcome.
• A decline in share prices can lead to rashly making cuts in inappropriate places.
• Companies sugarcoat the truth or buy into flashy sales pitches.
• Key employees are lost when companies merge.
• The acquiring company's management team is not experienced with regard to mergers and acquisitions and relies on a trial-and-error method.
• Companies panic and merge out of desperation.
• Corporate governance is simply inferior and ineffective.
• Executives manage the business integration but not the human integration. Acquisitions are treated simply as business transactions instead of a merging of organizations composed of human beings.
• Departments are left to fend for themselves and work separately, which means they could end up working in conflicting directions.
• Companies do not clarify or help employees understand the merger's intent.
• There is a lack of high-level, full-time leadership, accountability and a team of capable people to oversee the project.
• Companies want to contract out merger integration; though some tasks can be contracted out, the merger must be run by the organization.
• Team members who are supposed to be focusing solely on the merger integration are distracted with other projects.
• There are delays in decision making, which can affect results, costs and schedules.
• A communication breakdown can lead to failure—concerns need to be addressed, and employees need to know business objectives, what changes will occur and how they will be affected. Empty promises can lead to disaster.
• One company buys another on a whim.
• Companies don't conduct their own market research and instead rely on analysts.
• Some companies don't have the ability to say "no" to a deal and are more concerned with how it would look if they backed out.
• Cultural differences are ignored, or the acquiring company takes on a "winner's" attitude.

Although some of these reasons for failure may seem obvious and companies believe they would never make these mistakes, mergers often can take on a life of their own and head in the wrong direction quickly.

But steps can be taken to prevent failure. Focusing on aspects such as culture, communication, a shared vision, teamwork, defining goals and building trust can help lead to a successful merger.

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